A system dynamic model for Indonesian petrochemical industry emission reduction

Purpose This paper aims to identify all variables and parameters related to business and emission within the petrochemical industry. The variables and parameters specified will be modeled into a system dynamic model that will be a baseline for the proposed best scenario(s) to address the business issue related to emission reduction in the petrochemical industry. Design/methodology/approach Literature review and stakeholder interviews were conducted to define the key factors contributing to the emission reduction of the petrochemical industry. The key factors are then developed into a system dynamic model to measure the quantitative impact of changes in those variables on emission and industry profitability. Findings This paper provides an analysis of system dynamic model. It suggests that process optimization can lead to a slight amount reduction in emissions. In contrast, a significant reduction shows in the simulation result of bio-based feedstock utilization and implementation of advanced technology. To sustain the emission reduction, strong commitment from stakeholders and support from the government will play an important role. Research limitations/implications This research is limited to problem analysis of the primary product (high-value chemical) of the petrochemical industry by only considering the changes in the key factors of emission reduction. Practical implications This paper includes implications for interventions that can be imposed to reduce emission while retaining the business profitability. Originality/value The contribution of this study is to find the best scenario that can boost emission reduction within Indonesia’s petrochemical industry.